Retailers Bow Labels to Boost Offerings

Buyers are constantly on the hunt for the holy grail of footwear — the one product that no one else has but everyone wants.

At a time when consumers are increasingly demanding exclusivity and newness, some stores are tackling the challenge by scouring the globe and trawling trade shows with an extra-fine-tooth comb. Others are taking matters into their own hands by launching their in-house labels.

The concept of private label is nothing new — Barneys New York and On Pedder, for example, have both had successful store brands for years — but more retailers have been trying the approach in recent seasons, from majors to independents.

“We wanted a reason for customers to come to Chuckies [besides] just to see Jimmy Choo, Balenciaga or Marni, all the regulars you can find at any department store,” said Chuckies New York owner Ritch Erani, who launched NYFC in 2012 to sit alongside his other, more commercial in-house brand, Chuckies New York. “I wanted to do some more modern, edgier styles.”

Erani’s collections are now among his two stores’ top sellers and are merchandised with the retailer’s higher-end offerings such as Lanvin and Chloé. “We needed to get people in here for something they couldn’t find online and everywhere else,” he said. Priced from $495 to $995, NYFC includes stilettos, boots and booties incorporating details such as acrylic insets, metal charms and convertible accessories, while the tamer Chuckies New York line, selling for $595 to $795, addresses the market’s most popular trends and can always be in stock. It’s a strategic choice, given that designer labels usually create limited runs with little to no replenishment option. “It has been great for us,” Erani said.

Elyse Walker, whose Pacific Palisades, Calif., boutique and e-commerce site sells such luxury labels as Givenchy, Balenciaga, Aquazzura and Laurence Dacade, said she bowed her eponymous label for fall ’14 as a way to ensure desired silhouettes remained on the shelves. “There are categories where you don’t have enough fulfillment,” she said. “[For example], I can never have enough block-heel booties.”

Another aim was to provide particular features that customers requested. “I was hearing the same things over and over about comfort and a certain heel height — [2 inches] — that’s hard to find,” Walker added. The majority of her pumps, slippers, espadrilles and booties focus on wearability and are priced at $355 to $975. “This collection is designed from a merchant’s perspective. I know what’s going to sell and what the customer wants. It’s exciting. They don’t have this in their closet.”

Other players who have recently unveiled in-house labels include Nasty Gal, which unleashed its edgy, contemporary Shoe Cult line a year ago, and Free People, which will drop its store-branded boho-chic shoes this fall. Both retailers already had house apparel labels and completed the mix with footwear.

“Our customer enjoys the fact that she is able to come on the site and see shoes that not every girl is wearing,” said Nasty Gal’s VP of design, Sarah Wilkinson. “It boosts sales overall because we are driving more traffic to the footwear pages.”

In addition to enticing customers with diverse options, a store brand has other advantages. For starters, injecting more variety and flexibility in pricing can garner a new clientele that previously might have been aspirational.

“It’s a great opportunity, and I’m actually surprised that more people don’t do it,” said Ramya Giangola, founder of luxury retail consulting firm Gogoluxe, who also helped bow On Pedder’s house label, Pedder Red, a decade ago, to cater to a younger, more price-sensitive customer (the brand also is now available at Lane Crawford). She added that, as entities like On Pedder and personalities such as Nasty Gal founder Sophia Amoruso increasingly become brands themselves, store labels make more sense.

“There are a lot of retailers that have a great opportunity to [launch in-house labels] because there’s so much awareness around the retailer as a brand,” she added. “I think of people like Kirna Zabête — whose two [owners and fashion fixtures Sarah Easley and Beth Buccini] have such great personalities and so much style — and I wonder why they don’t do their own brand.”

But for all the pros, running an in-store label can be tricky business. The most obvious challenge for the retailer is avoiding competing with wholesale partners. “It has to be done just right,” said Steven Marotta, an analyst at CL King & Associates who specializes in footwear and apparel. “What you want to do is gain that incremental customer without cannibalizing what would have been an existing sale.”

Giangola agreed, noting that Pedder Group did extensive research before introducing Pedder Red in 2003. “As a retailer creating your own brand, you have to be sensitive and cautious about not taking too much inspiration from the other brands you carry,” she said. “You need to work hard to set that collection apart from anything else. You’d never want to jeopardize the relationship you have with your existing brands.”

Walker said the secret is building an in-depth knowledge of the customer. The retailer spent 15 years on the sales floor with her clients before bowing Elyse Walker footwear.

She also noted that actually designing the shoes — as opposed to sourcing product via private label — is helpful, too. “I’m not just putting my name on someone else’s shoe, [although that can be] a great opportunity for some retailers, but I’m actually designing this,” she said. “I’m in Europe and working on the fabrications, so it will complement our designer mix.”